Qatar crisis harming all countries involved

(VOVWORLD) - Rating agency Moody’s said in a report released Wednesday that the boycott of Qatar by a Saudi-led bloc of Arab states is hurting the economies of all the countries involved, with Bahrain and Qatar the most affected.
Qatar crisis harming all countries involved	 - ảnh 1The Ras Laffan Industrial City, Qatar's principal site for production of liquefied gas (Photo: VNA)

The report by Moody’s Investors Service said the row has translated into a credit negative for the entire six-nation Gulf Cooperation Council (GCC) - Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Oman, and Qatar. The dispute erupted in early June when Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt severed diplomatic ties and imposed economic sanctions on Qatar, accusing it of backing radical Islamist groups. Qatar faces large economic, financial, and social costs stemming from related travel and trade restrictions. The impact on Qatar so far has been most acute for trade, tourism, and the banking sector. Moody's said it does not expect that Qatar will have to borrow from the international capital market this year, but its financing costs will increase.

The standoff could also impair the sustainability of Bahrain's currency peg to the US dollar and will also increase the cost of borrowing for the kingdom, the poorest of the six oil-rich GCC nations. The diplomatic rift will inevitably impair the functioning of the GCC more severely as the row prolongs.